Some might remember an old sitcom episode where a TV station drops live turkeys from a helicopter, mistakenly believing that turkeys can fly. The metaphoric turkeys plummet down to the concrete and plop dead. Some how this seems like a good metaphor for the many stocks that have completely broken down on this Thanksgiving eve. The list of turkeys could stretch for pages and pages. Retail, banking, mortage companies are on the list with big names such as CFC, FRE, FNM, JWN, HD. So many stocks have broken under technical support, that traditional support levels look more like double edged swords rather than low risk points of entry.
As I have always written during my time blogging, buying the bottom (or selling the top) is a difficult game and rarely profitable because of the long odds. Few traders have the mindset and the execution, to do trade the turns. A high percentage that try, get in too early and then bury their heads in the sand instead of cutting their losses. The real stubborn ones sometimes lose everything instead of admitting they are wrong.
The big dollar fish continues to drive other markets and eat the other fish (gold, oil, stocks, bonds). The Fed is painted into a corner with the recession scare, combined with an anemic dollar. Further rate cuts drive the dollar ever lower, holding rates steady, means a higher chance of recession. At some point higher commodity prices from a lower dollar can also cause recession.
Be thankful and bless what you have, how ever much, or how ever little it may seem.
Happy Thanksgiving everyone.
Positions: MRK, T hedged longs
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